The Advance GDP report was released today: adjusted for
inflation, output decreased at an annualized rate of 3.8%. This is the largest quarterly drop in 26 years. This is the first estimate of fourth quarter growth, two more releases will follow with revised data. It is possible that the final numbers will improve, but I am not holding out hope.
The graph below tracks U.S. Treasury Debt as a
percentage of nominal (unadjusted for inflation) GDP. On 9/30/08 (the most recent date with finalized data), the ratio stood at 69.6%. This is the highest level in a generation. Preliminarily, using Treasury
estimates and today's GDP report, the ratio is at 75%.
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